Strong Job Market Boosts May Retail Results

RAPAPORT... US retail sales rebounded in May as the economic
and financial outlook stabilized, according to the National Retail Federation
(NRF).

Total purchase value grew 3.2% year on year, with sales
rising in nearly all categories, the trade organization reported last week.
Retail sales increased 0.5% over the previous month, after the government revised
its April data. It initially reported a 0.2% decline in April, which it updated
to a rise of 0.3%.

“[The figures] reinforce the ongoing strength of the
consumer and are consistent with a pick-up in the pace of the economy in the
coming months,” said NRF chief economist Jack Kleinhenz. “The strong job
market, recent income gains and elevated confidence translates into ongoing
support for spending.”

The general improvement follows a slowdown in sales at
specialist jewelry stores in the first four months of the year. Combined sales
for the store category in the January-to-April period declined 4.5% year on year,
while April sales fell 2.3% over the previous year, according to data from the
US Census Bureau. Jewelry figures for May are not yet available.

The NRF cautioned the future of retail could be
unsteady due to an escalation in trade tariffs, which may lead to a
“considerable” pullback in spending. Still, the Conference Board noted a more positive
outlook as its Leading Economic Index — which forecasts future economic activity — rose 0.2% for the month.

“Labor markets remain strong, with unemployment at its
lowest rate since the 1960s,” it explained. “Wages continue to grow at an
elevated pace and may even accelerate during the year. Correspondingly,
consumer confidence has stayed at historically high levels. These factors
should keep consumer spending growth at a healthy level.”